Omar et al v. 1 Front Street Grimaldi, Inc. et al

Filing 71

MEMORANDUM AND ORDER: For the reasons set forth in the attached memorandum and order, defense counsel's motion 63 to file certain supporting exhibits under seal is GRANTED and Defendants' motion 67 for reconsideration is DENIED. The C ourt notes that this action, as against Defendant Dumbo Restaurant Corp., is automatically stayed by operation of 11 U.S.C. § 362(a) pending resolution of the bankruptcy proceedings in case number 18-46265-nhl (Bankr. E.D.N.Y.). Defendant Dumbo Restaurant Corp. shall file a status report regarding its bankruptcy proceedings by April 30, 2019. Ordered by Judge LaShann DeArcy Hall on 3/13/2019. (Valentin, Winnethka)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
YASER OMAR, EMMANUEL GARCIA, and
CHARLIE GARCIA, individually and on behalf of all
others similarly situated,
Plaintiffs,
v.
1 FRONT STREET GRIMALDI, INC. d/b/a
Grimaldi’s Pizzeria, DUMBO RESTAURANT CORP.
d/b/a Grimaldi’s Pizzeria, SIXTH AVENUE
GRIMALDI, INC. d/b/a Grimaldi’s Pizzeria, 1215
SURF AVE. RESTAURANT CORP. d/b/a Grimalidi’s
Pizzeria, and FRANK CIOLLI, jointly and severally,

MEMORANDUM
AND ORDER
16-CV-05824 (LDH) (CLP)

Defendants.
LASHANN DEARCY HALL, United States District Judge:
Before the Court is Defendants’ February 19, 2019 motion for reconsideration of the
Court’s February 4, 2019 order denying defense counsel’s request for a stay of these
proceedings. (ECF No. 67.)
On January 23, 2019, Rivkin Radler LLP (“Rivkin Radler”) moved to withdraw as
counsel to Defendants and to stay this action pending resolution of its motion and for an
additional 60 days to permit Defendants to retain new counsel. 1 (Order Show Cause, ECF No.
62.) The basis for Rivkin Radler’s motion to withdraw was Defendants' alleged failure to pay
their legal fees since at least September 2018. (Decl. Scott R. Green Supp. Order Show Cause
Withdraw Counsel (“Green Decl.”) ¶ 8, ECF No. 62-1.) Rivkin Radler made two arguments in
support of its request for an interim stay. First, Rivkin Radler argued that, without a stay,
Defendants would suffer unfair prejudice by waiving their right to object to Magistrate Judge
Cheryl L. Pollack’s January 8, 2019 report and recommendation (the “R&R”) (ECF No. 60).
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Rivkin Radler also moved to file certain supporting exhibits under seal. (ECF No. 63.) The motion is GRANTED.

(Green Decl. ¶¶ 19–20.) Objections to the R&R were due by January 25, 2019, two days after
Rivkin Radler’s motion. (Id. ¶ 18.) Notably, Rivkin Radler failed to provide good cause for
waiting more than 450 days after Defendants stopped paying their bills, more than three months
after the firm began its unsuccessful efforts to collect the outstanding debts, more than two
weeks after the R&R was issued, and only two days before the deadline for objections before
moving for the relief they ultimately sought. If Rivkin Radler assumed that the urgency of the
impending deadline would inure to its or its clients’ benefit, the firm was mistaken. Any
resulting prejudice to Defendants was entirely self-inflicted by their counsel. Second, Rivkin
Radler argued that a 60-day stay would not cause unreasonable delay in these proceedings,
adding that Defendant Dumbo Restaurant Corp.’s bankruptcy proceeding, which was
commenced on October 30, 2018, “would likely support a separate, distinct, and necessary cause
for a stay or partial stay in this matter” in any event. (Id. ¶¶ 21–22.) The firm cited no caselaw
or statutory authority and made no legal analysis supporting this argument. Indeed, the firm's
entire argument on this point comprised the quoted sentence above and one other nearly identical
sentence. (Id. ¶¶ 16, 22.)
11 U.S.C. § 362(a)(1) provides, in relevant part, that the filing of certain bankruptcy
petitions operates as an automatic stay of any “action or proceeding against the debtor that was
or could have been commenced before the commencement of the [bankruptcy case].” “It is wellestablished that stays pursuant to § 362(a) are limited to debtors and do not encompass nonbankrupt co-defendants.” Teachers Ins. & Annuity Ass’n of Am. v. Butler, 803 F.2d 61, 65 (2d
Cir. 1986); accord Nippon Fire & Marine Ins. Co., Ltd. v. Skyway Freight Sys., Inc., 235 F.3d
53, 58 (2d Cir. 2000). Although district courts have separate, discretionary authority under 11
U.S.C. § 105 to extend this automatic stay to non-bankrupt co-defendants, it is the defendants’
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burden to show that such an exception to the general rule should apply. Millard v.
Developmental Disabilities Inst., Inc., 266 B.R. 42, 44 (E.D.N.Y. 2001) (declining to extend
automatic stay to non-bankrupt corporate and individual co-defendants in wage-and-hour case).
District courts in this circuit have held that an automatic stay pursuant to § 362(a) as to a debtor
co-defendant does not preclude subsequent class certification as to claims against non-debtor codefendants in the same action. E.g., Ebin v. Kangadis Family Mgmt. LLC, 45 F. Supp. 3d 395,
398 (S.D.N.Y. 2014); In re Globalstar, No. 01-CV-1748, 2004 WL 2754674, at *2 (S.D.N.Y.
Dec. 1, 2004). In its January 23 motion, Rivkin Radler offered the Court no basis for extending
the automatic stay of this action against Defendant Dumbo Restaurant Corp. to the non-debtor
co-defendants in this action.
Nonetheless, Defendants’ February 19, 2019 motion seeks reconsideration of the Court’s
February 4, 2019 order denying a stay of this entire action pending resolution of Rivkin Radler’s
motion to withdraw and, presumably, Defendants’ retention of new counsel. (ECF No. 67.) It is
well-settled that a motion for reconsideration is not the proper vehicle for obtaining a “second
bite at the apple.” Analytical Surveys, Inc. v. Tonga Partners, L.P., 684 F.3d 36, 52 (2d Cir.
2012) (quoting Sequa Corp. v. GBJ Corp., 156 F.3d 136, 144 (2d Cir. 1998)). The standard for
granting a motion for reconsideration is “strict, and reconsideration will generally be denied
unless the moving party can point to controlling decisions or data that the court overlooked.” Id.
(quoting Shrader v. CSX Transp., Inc., 70 F.3d 255, 257 (2d Cir. 1995)). “The major grounds
justifying reconsideration are an intervening change of controlling law, the availability of new
evidence, or the need to correct a clear error or prevent manifest injustice.” Virgin Atl. Airways,
Ltd. v. Nat’l Mediation Bd., 956 F.2d 1245, 1255 (2d Cir. 1992) (internal quotation marks and
citation omitted). “Thus, the movant cannot rely upon facts, issues, or arguments that were
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previously available but not presented to the court, or reargue issues that have already been
considered.” Indergit v. Rite Aid Corp., 52 F. Supp. 3d 522, 523 (S.D.N.Y. 2014).
Here, the Court shall not consider Defendants’ argument that Rivkin Radler acted in good
faith in gathering information about the bankruptcy proceedings between November 2018 and
“early January 2019,” because such information was certainly known to Rivkin Radler by
January 23, 2019, yet was not included in its motion to withdraw. Defendants’ other argument—
that the bankruptcy proceeding automatically stays this action as to all Defendants—is simply
wrong, for the reasons set forth above. Defendants point to no change of controlling law to
support their argument, and the only case they cite is fatal to their position here. See Franco v.
Ideal Mortgage Bankers, Inc., No. 07-CV-3956, 2017 WL 5195223, at *2–3 (E.D.N.Y. Nov. 9,
2017) (“A court should not extend the automatic stay where the non-debtor is ‘independently
liable as, for example, where the debtor and another are joint tortfeasors or where the
nondebtor’s liability rests upon his own breach of duty.’” (quoting In re FPSDA I, LLC, No. 1075439, 2012 WL 6681794, at *8 (Bankr. E.D.N.Y. Dec. 21, 2012)).
For the foregoing reasons, Defendants’ motion for reconsideration is DENIED. The
Court notes that this action, as against Defendant Dumbo Restaurant Corp., is automatically
stayed pending resolution of the bankruptcy proceedings pending in case number 18-46265-nhl
(Bankr. E.D.N.Y.). Defendant Dumbo Restaurant Corp. shall file a status report regarding its
bankruptcy proceedings by April 30, 2019.
SO ORDERED.
Dated: Brooklyn, New York
March 13, 2019

s/ LDH
LASHANN DEARCY HALL
United States District Judge
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